How to control spending

An internal e-commerce site, called Marketplace, has been a real time-saver in the Harford County (Md.) Public Schools, says Jeff LaPorta, Supervisor of Purchasing, in the school district. The district has 54 schools with 600 purchasing card users, and follows a decentralized purchasing model.

LaPorta describes the benefits of the district’s Marketplace site, including how it helps control out-of-contract spend, in a recent webinar, which is part of an online U.S. Communities series on cooperative purchasing.

LaPorta tells webinar attendees that his department’s goal is making it  easier for end-users to buy needed products and services “We want end-users to spend their time paying attention to their staff and their students, and not spend a lot of time working through the purchasing process. We want to make it easy.”
That’s one reason the purchasing department created a shopping marketplace for staff, LaPorta says. The Hartford Schools’ Marketplace shopping site sits on the district’s SharePoint platform within the district’s intranet setup. It has the same look and feel as the U.S. Communities Marketplace site.

Automating communication about vendor changes

As contracts end, there’s continuous change in the district’s vendor lineup. LaPorta says the Marketplace site helps keep end-users aware of new district suppliers, and has solved several problems, for example:

Problem: Our end users were continuously required to bookmark our vendors’ websites.
Solution: Marketplace offers a single shopping platform where all current vendors could be accessed.
Problem: Users were required to repeatedly create log-ins and passwords for new supplier sites.
Solution: The Marketplace has a single log-on site requiring only one username and password.
Problem: Transition to new vendors was frequently missed because users were required to check the district’s SharePoint site to find out when vendors changed.
Solution: Vendor changes are managed in the shopping platform, making it easy for end-users to find out when vendors changed.

In the past, the purchasing department emailed end-users alerting them to changes in the supplier lineup. “Now, we don’t have to be so proactive in alerting users that we have a new contract and/or a new vendor. Users just go to Marketplace to get the names and other information on the current contracted suppliers,” LaPorta says. The purchasing department, which has lost two staffers over the past two years due to budget cuts, appreciates not having to send out the constant e-mail alerts.

Controlling out-of-contract spend

The district is working to control out-of-contract spend. Sometimes, LaPorta says school staffers settle in with one vendor that they have been using, even though the district no longer has a contract with the old vendor. The staffers are used to working with that old vendor, even though the newly contracted vendor has wider product breadth, greater assortment of specific products, better prices or better shipping terms and deals.

He says eliminating maverick spending is a process. “We have to go back and try to control that—it’s difficult. We do research and run reports to find out who is doing out-of-contract spend, and where personnel are spending the money. It takes time,” LaPorta says.

The flexibility of the district’s e-commerce site is a big help. “It puts all reports in one spot. The reports show who is buying what, where are they buying from and how much money they are spending. This is data that helps us identify what contractors and what suppliers we want to include in our Marketplace. It helps us identify who our users are not buying from, and why they are not buying from those vendors,” LaPorta adds.

The site’s e-commerce reports help identify out-of-contract spend and why users are going out-of-contract. This can help bring users into compliance, LaPorta says.
How does the purchasing department decide what suppliers are displayed on the schools’ Marketplace site? “We ask, where is all of our spend? We look at number of transactions, and we also look at the district’s P-card reports—where are the highest numbers of transactions occurring?” LaPorta tells webinar attendees.

The dollar amount spent per supplier is another criteria they use to decide which supplier to display on the site. “You could have someone spending $100,000 on just two transactions—does that help? Yes, but we are looking for where the repeated transactions go,” LaPorta adds. Having vendors displayed and readily accessible on the site is the most effective way to simplify the buying process for users, LaPorta says.

Small local suppliers meet the district’s needs for flags, maps, sewing machines and related supplies and products. These vendors often don’t have web site URLs to display on the Marketplace site. “Our users are happy with the suppliers, we get good prices for their merchandise and we still use them. We don’t want them to just fall off and stop doing business with us,” LaPorta says.

For small mom and pop shops that are often local and that don’t have a site, the district uses icons that link to the shop’s ordering instructions so users can get products.“We put up ordering instructions on our e-commerce shopping platform, so our users only have to go to one spot. They go here to click, buy and charge with their P-card or credit card,” LaPorta says.

With the instructions, users don’t have to maneuver from one site to another to make a purchase. “This is how to keep those small vendors connected and doing business with the district. The platform is attractive to the purchasing department and users,” LaPorta explains.

How E-commerce systems help manage spend

During the webinar, Alexis Turner, program manager at U.S. Communities, described how E-commerce systems can help track and report agency spend.

She described how her firm helps public agencies and nonprofits collaborate to leverage their buying power and purchasing volume to get better prices on their buys. By having a single contract instead of each agency maintaining its own contract, U.S. Communities works to leverage its combined volume.

Turner also talked about the cooperative’s Marketplace site. It is a free tool that U.S. Communities makes available to any agency to use to access the cooperative’s contracts, Turner  says, “It’s an example of an e-commerce system.  The platform can be used by agencies to direct their shoppers to contracts that the cooperative has put in place. It helps agency users to complete their shopping in an easy and trackable way.”

Turner cited the value of U.S. Community’s program managers. They help ensure that agencies are getting what they need from suppliers through the cooperative’s contracts. Turner says its managers:

Serve as liaison between agencies and suppliers,
Connect agencies with suppliers,
Help troubleshoot supplier issues, and
Educate agencies on supplier products and solutions.

Go here for details on how to view the U.S. Communities’ webinar series.

Michael Keating is Senior Editor at Government Product News, an American City & County sister brand.

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